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How Canada benefits from instability in Ecuador

Ottawa appears largely unconcerned by Ecuador’s social and institutional decay

Economic CrisisCanadian BusinessLatin America and the Caribbean

Military personnel stands guard at Canela Radio in Quito. Photo by Franklin Jacome/Agencia Press South.

On January 7, infamous drug lord Adolfo Macías (Fito), leader of the Los Choneros cartel, escaped from prison in Guayaquil, Ecuador.

Newly elected President Daniel Noboa declared a state of emergency, prompting a nationwide and seemingly coordinated response from the country’s gangs, including bombings, kidnappings, an attack on the University of Guayaquil and, most well-known, the storming of a newsroom during a live broadcast.

Thirteen people were killed in the violence. Now Ecuador is mired in what Noboa calls an “armed internal conflict” against the country’s narcotraffickers and criminal organizations.

The explosion of violence may come as a shock to some, but in truth, Ecuador’s security situation has decayed catastrophically since 2017, the year in which left-wing President Rafael Correa departed from power.

While not everything can be ascribed to internal factors, the correlation is clear: as Correa’s successors ran Ecuador’s economy into the ground by turning toward IMF-approved austerity policies, so too did homicide rates grow, gangs expand, and the security services erode.

When Correa came to power in 2007, Ecuador’s homicide rate sat at around the Latin American average: 16 per 100,000. By the time he left power in 2017, the homicide rate had plummeted to 5.8 per 100,000, one of the lowest in the region.

What caused this dramatic turnaround?

Without a doubt, the repressive apparatuses of the state were empowered with greater funding and training—this must be acknowledged. Indeed, under Correa, the Ecuadorian police force grew by 40 percent.

At the same time, however, the Correa administration paired state investment with a fresh approach to policing, one based on decentralization and deepened community links. Writing for the Centre for Economic and Policy Research (CEPR), Guillaume Long explains:

The policing doctrine, moreover, changed substantially, with the government prioritizing decentralization and a more small-scale, neighborhood-based approach. Research suggests that the drive to implement a proximity police played a big role in reducing Ecuador’s crime rates… The state was, in short, making itself present on its territory, an exercise in Weberian sovereignty unlike anything that had come before.

Under Correa, security reform was also coupled with non-coercive social policies aimed at crime reduction. For example, writes Long:

the government strove to rehabilitate and reintegrate members of Ecuador’s urban gangs. The government approached the Latin Kings and Queens, Ñetas, and Masters of the Street to convince them to ditch crime in favor of the government’s social and educational schemes… Research from the Inter-American Development Bank (IDB) was congratulatory and even recommended that this “social inclusion approach to street gangs should be continued and highlighted as a model of best practices of the state.”

At the same time, Correa’s socialist-oriented economic policies engendered considerable growth. Under his presidency, poverty declined by 38 percent, with extreme poverty cut by 47 percent. Poverty reduction under Correa was the result of increased social spending (which doubled during his tenure), with notable funding increases for education, health, urban development, and housing. Meanwhile, cash transfer programs put money directly into the hands of the poor.

The CEPR found that:

these results were not driven by a “commodities boom,” but from deliberate policy choices and reforms that the Correa government enacted, including ending central bank independence, defaulting on illegitimate debt, taxing capital leaving the country, countercyclical fiscal policy, and—in response to the most recent oil price crash—tariffs implemented under the WTO’s provision for emergency balance of payments safeguards.

Former Ecuadorian President Daniel Noboa. Photo by Asamblea Nacional del Ecuador/Flickr.

The roots of instability

Since Correa left power in 2017, the situation has worsened dramatically.

When he left office, the homicide rate was 5.8. Today it is 46 per 100,000, an eightfold increase and one of the highest in Latin America.

Meanwhile, poverty has steadily increased: by 2019, it was up 17 percent. Then the COVID-19 pandemic hit, causing growth in unemployment and a spike in organized crime activity as, in Long’s words, “criminal organizations used the COVID-19 shutdowns to consolidate their control over territory and ties with impoverished sectors of the population.”

The pandemic can only be partly blamed. Most responsibility can be assigned to the neoliberal policies of Correa’s successors, namely Lenín Moreno, the most unpopular president in modern Ecuadorian history.

Moreno ran as a left-winger, the man who would continue Correa’s legacy of stability and socioeconomic development. Yet, despite running as a correísta, he quickly turned against Correa’s legacy—slashing social spending, welcoming back the IMF, ditching regional integration initiatives like UNASUR and ALBA, deepening ties with Washington and Ottawa, and bringing the judiciary under executive control so as to persecute the country’s left.

While reducing state budgets and laying off thousands, Moreno also undid Correa’s security reforms. His austerity went beyond slashing budgets: Moreno closed several ministries, “including the Coordinating Ministry of Security, which oversaw public policy, and the Ministry of Justice and Human Rights, responsible among other things for administering the prison system; not even the school charged with training prison guards was spared.” And he didn’t stop there:

The Ministry of the Interior, in charge of the police, was merged with another ministry mostly responsible for the executive’s relations with other branches of government. The country’s intelligence agency was shut down and its activities were handed over to a new outfit comprised of retired military officers.

Meanwhile, Ecuador’s judiciary, rather than targeting drug lords, dedicated itself to lawfare against the country’s left, including Correa and many of his allies.

Moreno’s conservative successor, Guillermo Lasso, continued policies of lawfare, state reduction, and social disinvestment. As a result, poverty increased and criminal organizations tightened their hold on the country.

Nevertheless, even Paco Moncayo, Lasso’s security minister, had to admit that Moreno completely dismantled the country’s security system.

Lasso’s successor, Daniel Noboa, is the son of Álvaro Noboa, the richest man in Ecuador. Unsurprisingly, President Noboa is a man of the right. This does not bode well for Ecuador’s future, as right-wing economic policies played a huge role, perhaps the defining one, in the collapse of internal security in the country.

Meanwhile, amid skyrocketing violence and political instability, Canada’s main diplomatic engagement with Ecuador has been free trade negotiations aimed at empowering Canadian mining interests in the country.

Canada’s focus: mining profits over peace

Ottawa was always suspicious of Rafael Correa, whose socialist-oriented government ruled Ecuador from 2007 to 2017. This was evidenced by the fact that, after an attempted coup against Correa in September 2010, the Canadian government was slow to issue a diplomatic statement—unlike France, Spain, and many Latin American countries, who were quick to denounce the coup attempt.

The attempted coup saw police officers in the capital Quito kidnap Correa and hold him against his will. The officers were protesting the withdrawal of promotion bonuses from the police and military, as well as the extension of time between promotions from five to seven years (the fact that Correa had already increased police wages “from the 2006 salary of $355 per month to $750 per month” did not mollify the officers).

Correa was sitting at a 67 percent approval rating in Quito at the time, and with the help of his supporters and regional progressive organizations, the coup was thwarted. Nevertheless, Canada waited until the Ecuadorian military declared its loyalty to Correa before releasing a muddled statement which read in part:

Canada is concerned about the growing unrest in Ecuador and is monitoring the situation closely… We call on all parties to refrain from violence and any other actions that could imperil the rule of law and the country’s democratic institutions.

Canada’s subsequent silence regarding the persecution of progressive movements by Correa’s successors suggests that the left-wing president, and his allies in the social movements, were always a thorn in the side of Canadian capital—mainly, the Canadian mining interests that are so prominent in Ecuador, generating violence and instability throughout the country.

While Moreno and Lasso destroyed Ecuador’s economy and disarmed its security sector, their neoliberal policies opened the country’s resources to foreign investment far more than under Correa.

These changes pleased the Canadian government. As a result, Trudeau and his officials hardly uttered a peep as these right-wing governments repressed popular uprisings in 2019, 2020, and 2022.

Following the escape from prison of infamous drug lord Adolfo Macías, the government of Ecuador declared an internal armed conflict against the country’s gangs. Photo from X.

In fact, during the 2022 uprising, Ottawa sided openly with the Ecuadorian right. The Canadian Embassy in Ecuador responded to the progressive protests by demeaning them as “violent riots,” mimicking the dehumanizing rhetoric of the right-wing. Furthermore, the Canadian government didn’t say a thing when the state arrested Leonidas Iza, president of the Confederation of Indigenous Nationalities of Ecuador (CONAIE), without charge, or when the police killed multiple protestors, or when Ecuador’s Alliance of Human Rights Organizations denounced the repression as a “massacre.”

Amid state repression of protests, plus international denunciations of lawfare against Ecuador’s left, Canada said nothing. Instead, Ottawa has focused on negotiating a free trade agreement (FTA) that, if implemented, will greatly empower Canadian mining companies.

As Ecuador was on track for its most violent year on record in 2023, Canada’s diplomatic engagements focused on ensuring Ecuador’s resources were made more accessible to Canadian companies. This while Ecuadorian social and environmental groups loudly expressed their opposition to the FTA.

A statement signed by sixteen organizations noted Canada’s role in intensifying social, economic, and political crises in the region:

[W]e are… concerned that an FTA with Canada will guarantee greater impunity for Canadian investments in the extractive sector, mainly mining, in Indigenous and peasant territories, water recharge areas, and forests, where mining projects are being opposed due to evidence of water contamination. We are concerned that an FTA will lead to deforestation, the destruction of the páramos, forced displacement, a rupture of the social fabric, as well as violence, criminalization, and prosecution of those who defend human rights and the environment.

Even now, in the context of “armed internal conflict,” Canada is most concerned with negotiating the FTA. This includes negotiations over controversial “investor-state dispute settlement” (ISDS) mechanisms, which would allow Canadian companies to sue the Ecuadorian government if they believe the state has interfered with their ability to profit. ISDS settlements often result in the state in question being forced to pay foreign companies millions in “compensation.”

All this means that, at a time when the Ecuadorian government’s social disinvestment has wrecked the country’s economy and security sector, Canada is arguing for its right to deprive Ecuador of even more public money.

Ottawa’s main concern is Ecuador’s resources: how to access them, and how to ensure Canadians can bring home as much profit as possible while exploiting them.

It is a national embarrassment, but sadly, par for the course when it comes to Canada’s Latin America policy.

Owen Schalk is a writer from rural Manitoba. He is the author of Canada in Afghanistan: A story of military, diplomatic, political and media failure, 2003-2023.


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